john housley techcet group, llc ca...announced polysilicon capacity includes captive and merchant...

John HousleyTechcet Group, LLCLos Gatos, CA

Page [email protected]

Techcet MegaTrends™The Sure Facts –

Fact #1: Even during the worst years, the world almost always consumes more silicon than the year before. We think 2008 may have had a less than 3% increase over 2007. Some believe it was flat. Our prediction for semiconductor silicon (MSI) for 2009 is down 10%‐15%, if we are lucky. Fact #2: What the semiconductor market doesn’t consume the Solar market has been taking and likely will continue in volume consumed

“Green is In” –Opportunities may exist to lower greenhouse gas emissions or hazardous wasteMay threaten to limit growth of gases or chemicals that were once deemed “environmentally friendly” but are now not environmentally friendly enough

Growing market segments still linked to copper interconnectGrowth opportunities still exist in materials or processes that can lower cost per chip or per wafer


Techcet MegaTrends, continuedMaterials markets on average normally grow year to year, not for 2009Even in good times,exceptions are those materials that are tied directly to equipment installs or utilization (for example indirect materials)Bulk gases are least impacted by industry downturn (equipment still needs to be purged even when not in use)Materials markets will be slow to no growth for the next two years and may recover by late 2010200mm Fabs shutting down, flooding the market with 200mm used equipment


The MegaTrend to Watch

Taiwan and Korea are targeting the OEM and materials businessMaterials businesses will go where the customers demandSome materials prices will fall, needless and hopeless.Forecasting the future: The future looks like 6 months

Everything is connected to everything else

Other industries have more of an impact on Semiconductor Materials

Cost of earth, wind and fire continues to escalate (except for oil)

Materials constrained by external markets include:

Polysilicon / silane [solar]

Wet chemicals [bio‐fuels]

Titanium [aerospace and building]

Tungsten [industrial]

IPA / resists / organo compounds [petroleum]

More and more materials producers and suppliers are focused on the solar industry

May stimulate creative ways to lower costs

World economic recession taking a toll

R&D support from suppliers will get even worse

But what about the price of oil? The ole Oklahoma discount. Up 40%, down 10%

Supply Chain Concerns


Key Market Indicators –Total IC Process Materials 5 Year CAGR 7‐8%

$43 B total for 2007$12 B of this = FEOL process materials>$55 B estimated for 2011Costs of energy and raw materials constraining margins, forcing more rationalization and consolidation Sources: Techcet Group, LLC.,

TechSearch International, and SEMI

Direct Materials

27%

Silicon31%

Packaging38%

Indirect Materials

4%


Front End Materials Market $12 B in 2007 ; ~ $13 B for 2008

Source: Techcet Group, LLC.

Adv. Dielectrics and SOGs

5%

Electroplating1%

CMP11%

Gases18%

Masks22%

Photoresist9%

Ancillaries6%

Targets3%

Wet Chemicals6%

Graphite2%

Quartz6%

Silicon Carbide1%

Ceramics2%

Other Indirects8%

* Does not include silicon


Historic Silicon Usage ‐ SEMI

Sources: Historical Data – SEMI; 2008 estimate and 2009 Forecast - Techcet Group, LLC.

Silicon Consumption

0100020003000400050006000700080009000

10000

2001 2002 2003 2004 2005 2006 2007 2008est

2009est

Mill

ions

of S

q.In

ches

-40%

-30%

-20%

-10%

0%

10%

20%

30%

Perc

ent C

hang

e


PolySi CapacityAccording to SEMI, of the 10 major traditional suppliers, most of them plan to at least double, if not triple or more capacity in the next 5 years

In addition, there are at least a dozen potential new players

Many of the new players may be empty suits (sorry, empty buildings)

If they all produce what they announce, the capacity could be as much as 5X or greater 2011 over 2006

Techcet’s third law: in our business, for every action, there is an equal and opposite over‐reaction


Hemlock27%

Wacker19%

REC12%

Tokuyama10%

MEMC9%

Mitsubishi6%

Sumitomo2%

Other15%

Polysilicon Producers


Announced Polysilicon Capacity

Includes captive and merchant markets; solar and semiconductor applications. Does not include metallurgical gradeSource: SEMI, Techcet Group, LLC.

050,000

100,000150,000200,000250,000300,000350,000400,000450,000

2005 2006 2007 2008 2009 2010 2011 2012 2013

Ann

ual C

apac

ity (M

T/Yr

)

Established Suppliers New Entrants


Gases – Market Forecast and History

Gas market is less impacted by down turns given bulk gases are still consumed when equipment is idleGas market grew ~7% in 2008Expected to be less than 4% growth in 2009

Specialty Electronic Gas Market Share as a Percent of WW Revenues


AL21%

AP35%BOC/Linde

4%

Prax8%

TNS29%

Other3%


Regional Consumption of IC Gases 2007

Relates to high volume materials spanning all technology nodesBased on wafer start data and inputs from suppliers

Source: Critical Materials Report on Gases 2008

Techcet Group, LLC.


Gases ‐ Silane

Silane availability constrained by high demand for polysiliconNew plants coming ‐massive oversupply planned for 2010

Silane Demand vs. Production

05000

100001500020000250003000035000400004500050000

2006 2007 2008 2009 2010

Met

ric T

ons

WW Demand(polysilicon)

WW Demand(PVcells,IC&TFT fab)WWProduction


Wet Chemicals

Petroleum prices have fallen >25% over the past 5 months

Fall out from the wet chem business has left few major companies in this space

The majority of chemicals are bought locallySmall companies are King

These smaller companies are the ones left standing and may now actually have a margin


WW Photoresist Market

Photoresist grew a little in 08, not by volume but by total $ (ArF)However, market growth will be slowed by lower wafer starts and fab capacity cuts for 2009 and 2010.We predict as much as 12% or worse decline in resist volume in 09

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

2006 2007 2008 2009 2010 2011

Rev

enue

s ($

M's

)

-10%

-5%

0%

5%

10%

15%

20%

Per

cent

Cha

nge

* Semiconductor Application Only Source: Techcet Group, LLC.


Quartz Consumables (Spares)


Quartz and SiC market segments directly impacted by lack of equipment sales

These markets expected to decline 19% in 2008

Quartz and SiC will be boosted by demand for crucibles for solar cell wafers

$0

$400

$800

$1,200

2002 2003 2004 2005 2006 2007 2008fcst

2009fcst

Ingots/Boules

Tubes/RodsCold Fabrication (SW)

Hot Fabrication (Batch)


Photomasks

Mask market now $3.3B for 2008Negative growth (at least ‐6%) expected for 2009Merchant shops continue to lose share Captives now support 40% of total masks produced by revenue

DNP23%

Toppan20%

Photronics11%

TSMC*15%

Samsung*6%

Other Captives19%

Hoya4%

Other<1%

TMC2%

Source: Techcet Group, LLC

Market Share as a Percent of Total Mask Market Revenues


New and Potential Growth Opportunities

In the semiconductor industry, the adoption of copper continues and still drives new material opportunities and good market growthCMP still looks like a growth areaSolar may mean lower purity and lower margin materials but the volumes are too high to disregard. This market as a huge growth opportunity


Cu Interconnect Becoming Universal

2%

0%

20%

40%

60%

80%

100%

Perc

ent W

afer

Sta

rts

w/ C

u

RAM MPU45 nm

74%

56%

RAM MPU65 nm

71%

45%

RAM MPU90 nm

37%

RAM MPU130 nm

51%

15%

RAM MPU180 nm


CMP Consumables & Ancillaries Continue To Be Popular CMP consumables still growing on average 8% or better year/yearPad conditioners are a hotbed

Conditioner market for Cu CMP is large, partly due to low conditioner lifeNew materials, designs, research

Cu PCMP* is still a growth marketW PCMP niches will grow below 45nmS‐STI PCMP showing signs of life

PVA brushes – new names, new designs

Retaining rings – new materials*Post CMP cleaning*Post CMP cleaning

Advanced Pads for Next Advanced Pads for Next NodesNodes

Courtesy NexPlanarCourtesy NexPlanar


CMP Slurry Market Trend

0

500

1,000

1,500

2,000

2005 2006 2007 2008 2009 2010

Rev

enue

(Mill

ions

$U

SD) Upside

Downside

Upside, Downside or Something in Between?> 15 Slurry Suppliers Bring Price Competition, esp. Cu & BarrierSlurries

Cu and Barrier not “one size fits all”Ceria (“direct”) STI growingOxide defectivity challenges increase with advanced nodes


Solar Market Growing Fast!Two key technologies each growing >30% per year in volume

Silicon wafer based (20% – 30% growth)

Thin film (28%+)

Si wafer based solar cells now exceed ICs in terms of square inch equivalents and growing at a much higher rate

Silicon costs are coming down fast

Thin film solar cells will drive growth in deposition metals andmetal oxides, conductive inks as well as specialty and bulk gases

Generated F2 may find some success here to replace NF3, a more expensive chamber cleaning gas

The largest volume IC material consumed for solar is silane ‐used to make polysilicon and for nitride

www.techcet.comSMC - 1/2009


Solar Market Huge Growth

Global PV Capacity

Sources: JP Morgan, Photon International, Techcet Group, LLC.

0

1,000

2,000

3,000

4,000

5,000

6,000

19992000200120022003 200420052006200720082009

MW

p

0%10%20%30%40%50%60%70%80%

Gro

wth

Yr2

/Yr1


Challenges for the FutureContinuing Challenges

The cost of earth, wind and fire continues to rise, resulting in higher prices, finally being passed on to IDM’s and foundries

Precious metals increasingPetroleum based chemicals and carriers, oil price down, chemicals and plastics not down as muchShipping (gas and diesel down, shipping not)

Cost of developing and implementing new materials for successive generations is skyrocketing. Are the customers willing to pay?

New materials require costly development, but manufacturing volume use is low, at least at the beginning of the cycle; this dynamic is forcing materials suppliers to re‐evaluate, exit or minimize their involvement in the IC market

Emerging Challenges

The material efficiency effect of 300mm wafers begins to show (per chip usage) on materials. How will 450 mm wafers affect materials?

Materials companies moving to the customers


If You Don’t See It Here…Just Ask!

Photovoltaics/Solar Materials MarketsFPD Process Materials MarketsIII‐V Process MaterialsSputtering TargetsSiC and GraphiteHi K / ALDIon ImplantStrain MaterialsCMP Pads, Slurry, Conditioners


AcknowledgmentsDan Tracy, Ph.D. – SEMI

Lara Chamness ‐ SEMI

Techcet Group & Associates Lita Shon‐RoySteve Holland, Ph.D. Mike Fury, Ph.D. Robert Geffken, Ph.D.Jiro HanaueMaggie LeeKatherine DerbyshireLarry Thompson, Ph.D.Allan Wiesnoski

john housley techcet group, llc ca...announced polysilicon capacity includes captive and merchant...

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